Towards a European Statute for Social and Solidarity-Based Enterprise

A chat with Professor Antonio Fici about his latest study for the European Parliament. “The hope is to now move from theory to practice, meaning concrete legislative initiatives which identify and promote social enterprises.”

Social enterprises (SE) are subject to ad hoc legislation in an increasing number of EU jurisdictions, and legislative initiatives in this field are under consideration by EU institutions. With the aim of deepening the understanding of this topic, the Policy Department for Citizens’ Rights and Constitutional Affairs of the European Parliament commissioned, oversaw and published, just a few days ago, the study entitled “A European Statute for Social and Solidarity-Based Enterprise”.

The study was conducted by Antonio Fici, professor of Private Law at the University of Molise and consultant on the Third Sector for the Ministry of Labor and Social Policy. Professor Fici has collaborated in recent years with Euricse on many research projects focused on comparative law on cooperatives and SE.

In light of this recent publication, we took the opportunity to ask him a few questions concerning the state of the art of European legislation on SE.

Why does this study matter?

The study proves that among the EU institutions the theme of social economy actors, and in particular that of social enterprises, is gaining importance. Indeed, the EU seems to rely more and more on these subjects in order to increase the sociability rate of the single market and use them as an antidote to market failures and the employment crisis. The hope is to now move from theory to practice, meaning concrete legislative initiatives which identify and promote social enterprises.

Why is tailor made legislation on SE essential for the development of this business form?

There are several reasons why tailor made legislation on SE is crucial for the development of this unconventional form of business organization. The study thoroughly explores them and emphasizes the fact that specific legislation would allow social entrepreneurs to point out their distinctive identity towards various stakeholders, thus benefiting from the competitive advantage that operating under the legal status  of “social enterprise” should guarantee them. The considerable development in the phenomenon of social enterprises which took place in countries such as Italy and the United Kingdom after the approval of specific laws on SE is the plainest historical proof of what the paper theorizes. The increasing tendency of EU member states to adopt legislation on SE seems to prove the same. At present, at least 18 of them have one or more specific laws on this topic.

Could you provide a few examples of existing models of SE regulation?

The existing models of SE regulation can be classified in several ways. However, the most important one is the distinction between European laws where the social enterprise is a particular form of cooperative or capital company and those where the social enterprise is a normative qualification (or legal status) that actors with different legal forms (foundation, association, cooperative, capital company…) can acquire, provided that they satisfy certain requirements. The study analyzes both models and opts for the latter, which is the one currently in force in Italy as a consequence of legislative decree no. 155/2006 and of delegation law no. 106/2016 on the reform of the Third sector.

What are the core elements of an SE’s legal identity?

The legal identity of a SE obviously depends on the national legislation of reference. However, on a European level, a shared identity seems to be emerging. The study pinpoints the core elements of the European social enterprise. Among these, operating for purposes of general interest and not primarily for profit, carrying out an entrepreneurial activity with social aims, and having a democratic governance structure (or at least one that is participatory and includes the various stakeholders of the enterprise) are particularly important. It goes without saying that these characteristics slightly vary in the different national jurisdictions.

What are the main recommendations on the potential forms and contents of an EU legal statute?

The study recommends the adoption of EU legislation that acknowledges and disciplines SE as a particular normative qualification (or legal status). Moreover, it suggests using “European Social Enterprise” as the name for all business organizations that respect the European Statute and possess each and every identifying requirement. These requirements can be identified by EU legislators based on current legislation in member states and, especially, on the above mentioned shared identity. As a result of this European Statute, each member state would have a specific law on SE that homogeneously identifies this business form and, at the same time, preserves the specificities of each European jurisdiction. The resulting uniformity would concern the crucial elements of SE’s identity and boost their development, by making them more visible at a European level.